Enterprise Ireland wrote down the value of its investments in start-up companies and seed capital funds by €19.72 million at the end of 2004, according to its latest annual report.

With Irish companies operating in what the body described as an "extremely difficult environment", these losses were followed by a €5.69 million fall in the value of its stock market investments in the first 19 weeks of this year to €24.87 million.

Listed companies in which Enterprise Ireland has shareholdings include Waterford Crystal, Trintech and Trinity Biotech.

Despite the losses on its investments, Enterprise Ireland's head of investment said its accounting policies meant its books did not include any increases in the value of other investments. Some €13.51 million was written down on investments in companies, while another €6.21 million was written down from investments in seed and venture capital funds.

"That's the kind of write down that is necessary, but we are not reflecting any upturn in other stocks," Mr Higgins said. "We invest in a large number of start-ups, but a lot don't perform in line with expectations."

Enterprise Ireland chief executive Frank Ryan said the body would not review its policy of investing in indigenous companies. The body received €15.07 million from the disposal of shares and, after new investments were taken into account, had a net outflow of €29.12 million on its investment activities last year.

While export sales from indigenous companies backed by Enterprise Ireland grew by 5.6 per cent to €10.17 billion last year, the creation of 11,898 jobs in some of the body's client companies was offset by the loss of 13,215 jobs in others, a total loss of 1,317.

However, Mr Ryan hoped that net employment would increase this year and said that exports were ahead of a comparable figure of 0.8 per cent in 2003.

While exports to Britain and northern Europe performed best and US trade held up despite the dollar's weakness, Mr Ryan said exports to Germany were down due to its weak economy.

The annual report said Enterprise Ireland had transactions or contracts worth €5.49 million with companies in which its board members had an interest, including financial support worth €4.3 million to an unspecified number of companies.